Target Boosts Guidances Based on Increased Sales, Shares Jump
MINNEAPOLIS, MN – Target looks to be on the upswing, according to recent statements and financial outlooks released by the company. The retailer’s shares jumped 5 percent after Target stated that it expects a “modest increase” for its second-quarter earnings.
Yesterday, Target boosted its second-quarter earnings forecast, according to CNBC. Target expects these earnings to fall above the high-end of its previous forecast range, which was 95 cents to $1.15 a share. The reason? Improved traffic and sales among stores.
"Following better-than-expected results in the first quarter, we've seen additional, broad-based improvement in traffic and category sales trends in the second quarter, despite continued challenges in the competitive environment," CEO Brian Cornell said in a statement.
This news comes after previous predictions from the retailer that same-store sales would be negative, following the trend of its previous four consecutive quarters. CNBC noted that there were hints that Target’s same-store trends were improving during the first quarter. Target stated that its new earnings guidance was helped by a net tax effect related to its global sourcing operations.
Erin Conroy, Senior Manager of Public Relations, elaborated further and stated that Target has seen “broad-based improvements across the business,” according to CNBC.
Analysts noted to the source that Target seems to be fixing its previously struggling foot traffic and maintains a steady e-commerce presence, but the chain still needs to invest improvement in its grocery business.
As we previously reported, Target announced a $7 billion investment plan earlier this year to boost the evolution of the company over the next three years. Previous to this, Target announced a long-term overhaul of strategy and remodels to 600 of its stores by 2019 to further its brand.
Target plans to release its Q2 earnings later this year, in August.
Is Target’s improved sales trend indicative of lasting upward momentum? AndNowUKnow will report.